Two downtown San Jose towers — including one of its very best addresses — are being offered for sale amid expectations that investor demand is growing for buildings in the central business district.

Equity Office Properties Trust has hired HFF to market 225 West Santa Clara St., a 350,000-square-foot, 16-story tower commonly known as the Deloitte building, according to multiple industry sources.

The tower is considered one of downtown San Jose's gems -- perhaps in the top three or four office buildings downtown. (A runner-up, EOP's own 10 Almaden, is across the street.) In addition to Deloitte, which has 150,000 square feet, blue-chip tenants include Morgan Stanley, Wells Fargo, MetLife, CBRE Group Inc. and Gensler. It is currently 95-percent occupied.

At the same time, Eastdil Secured will soon bring to market 60 S. Market St., a 232,000-square-foot, 16-story tower, according to several industry sources. The law firm Hoge Fenton Jones & Appel is a major tenant in the building, which is owned by AREA Property Partners.

Greg Cioth, managing director for Eastdil in San Jose, declined to comment. Steven Golubchik, managing director for HFF in San Francisco, also declined to comment.

Building backstory

The sales will be a major test of whether investors are willing to bet on Downtown San Jose, which has seen a flurry of building trades over the last several quarters but few large leases.

Still, global demand for Silicon Valley real estate -- and nosebleed prices in San Francisco and more core Peninsula markets -- could boost the attraction of the South Bay's largest city in the eyes of more institutional and overseas investors.

Equity bought 225 West Santa Clara St. from Opus West in December 2003 for $103 million, or $300 per square foot. But downtown observers expect the property to fetch a higher price per pound -- perhaps mid- to high-$300s -- given investor appetite for quality assets in Silicon Valley. (One source said a square-foot price "with a four in front of it" was possible.)

"They couldn't have better tenants, it's a rock-star roster," said Mark Ritchie of Ritchie Commercial. "This should break the records for prices per foot on a major office building in downtown San Jose."

The building's history is personal for Ritchie, who worked with Opus in the late-1990s on its development and leasing. Ritchie helped convince Opus to build a single tower with larger floor plates (the original plan was for a two skinnier towers.) The decision has proved prescient given tenants' desire for larger floors today. Before it was completed in 2001, the building was more than 60-percent pre-leased with tenants including Deloitte, the former law firm Thelen Reid & Priest and Smith Barney.

"It was the last spec office building downtown, and it was the most successful building from a pre-leasing standpoint," Ritchie said.

The two offerings are unlikely to compete for the same capital: The EOP property should attract institutional money in search of more "core" assets, while 60 South Market, which was built in 1986, could find a more value-add investor. The latter building has seen significant leasing activity lately, adding a Boston Private Bank on the ground floor retail space, and landing RetailNext. It includes a five-story parking structure with about 800 spaces.

The most recent Class A office property to trade downtown was 303 Almaden, which Rockwood Captital bought from Boston Properties for $40 million, or $253 per square foot. Late last year, CBRE Global Investors bought 50 West San Fernando from Forest City Enterprises for $93.1 million, or $285 per square foot. And DiNapoli Capital Partners and Angelo Gordon picked up 160 W. Santa Clara St. in late December for about $63 million, or about $280 a square foot.

Investors are betting that downtown will attract more leasing as tenants get priced out of northern markets. So far, that hope has not been borne out, with few large deals leaving downtown vacancy stuck around 20 percent.

But Ritchie, a consummate realist who is not one to sugar-coat market trends, says he cannot believe there won't be a march into the area soon given high rents elsewhere.